3 minute read 28 Aug 2018
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Three ways the role of internal audit is transforming

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US Americas

Multidisciplinary professional services organization

3 minute read 28 Aug 2018

Technology is enabling internal audit departments to develop more forward-looking capabilities offering both challenges and opportunities.

Technological advances are rapidly changing the way companies do business and affecting how the internal audit function approaches risks and controls. New digital tools also are enabling internal audit departments to function more efficiently and to develop more forward-looking capabilities. This opens the door for internal audit to manage strategic risk and focus on more valuable tasks.

Today’s internal audit functions are often challenged to perform both traditional assurance activities and new, value-creating tasks. As businesses consider new business models and integrate new digital platforms, internal auditors must adopt new approaches to testing risks and controls—which may be enabled in part by digital technologies. This environment, in turn, requires a new approach to recruiting and training people so that the internal audit function is staffed with the right mix of skills. Amid these circumstances, the audit committee, through its oversight responsibility, has an opportunity to help the chief audit executive (CAE) and the internal audit team deliver greater value for the broader organization.

  • Members of the Audit Committee Leadership Network gathered June 1, 2018, in Washington, DC, to discuss how the role of internal audit function is evolving and expanding.

1.   Internal audit may be able to play a more advisory role

As companies focus not only on mitigating risk but also on taking the right risks, internal audit can play a key role. From sharing business practices it finds through its work across the organization to assisting in special projects and creating useful digital tools for other business functions, internal audit is expanding its value to the organization.

Members of the audit committee network, however, caution against losing sight of the internal auditors’ basic and core activities, particularly as the function has adjusted to a more flexible model for risk assessment and analysis.

2.   Staffing challenges

As the internal audit team’s function expands, finding the right mix of talent to serve those roles has become a challenge. The team needs audit professionals as well as those with broader business knowledge and technical expertise. Companies take a variety of approaches, such as rotating professionals from other parts of the business or employing third-party resources.

3.   Audit committee oversight

Audit committee involvement with the internal audit function has never been more important. Audit committees can help assist the team’s evolution in the current business environment. Suggested tactics discussed during the meeting include assessments that result in actionable feedback, actively engaging with the chief audit executive and other members of the team, demonstrating to the rest of management the esteem in which the board holds the chief audit executives and using metrics to track the department’s performance.

Summary

As businesses consider new business models and integrate new digital platforms, internal auditors must adopt new approaches to testing risks and controls.

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US Americas

Multidisciplinary professional services organization